While the Diary of a Mad Hedge Fund Trader focuses on investment over a one week to a six-month time frame, Mad Day Trader, provided by Bill Davis, will exploit money-making opportunities over a brief ten minute to three-day window. It is ideally suited for day traders, but can also be used by long-term investors to improve market timing for entry and exit points.
CURRENT POSITIONS:
GOGO Long at $19.93
Total Premium Collected $1.95
ASNA Long at $14.20
Total Premium Collected $0.75
DUST Long $4.50
Total Premium Collected $0.70
SNAP Long at $14.54
Total Premium Collected - $1.65
RRC Long at $11.85
Total Premium Collected $0.70
RIG Long at $8.81
Premium Collected - $0.81
FEYE Long at $17.18
Total Premium Collected $0.80
Short April 12th - $17.50 call @ $0.25
FCX Long at $12.74
Total Premium Collected $0.73
Short April 12th - $13.50 call @ $0.25
CLW Long May - $20.00 call for $2.00
CLW Short May - $22.50 call for $1.00
FB Long April 12th - $172.50 Put for $1.64
FB Short April 12th - $167.50 Put for $0.58
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I did suggest a short term put spread on Facebook yesterday. This trade is similar to the one I recommended last week on NVDA, except that with NVDA the trade was to the upside.
With these short term trades, the idea is to risk a small portion of your portfolio on a short term overbought or oversold condition. And that is how this trade is structured.
The S & P 500 continued to inch up slightly. For the day, it closed up 6.16 points to close at 2,873.40.
And yesterday's high was 2,885.25 which put the market within five points of our upside objective.
But, the VIX did get a bid which makes me concerned that short term profit-taking should set in. In fact, the S & P 500 and the VIX diverged in that they both closed to the upside.
This is not a perfect indication that the market should turn but it does put us on alert that a change in direction could be forthcoming.
Because of the divergence, I would like to take a look at the sentiment indicators that I track.
The bullish percent index now reads 73.6% and the percent of stocks above their 200-day average reads 66.53%.
Both these indicators are approaching overbought levels but are not quite there. The 80% level is generally considered overbought for these indicators and they are getting close.
But, timing with these sentiment indicators is not perfect. They put you on warning that a change can happen.
As a point of reference, the bullish percent index read just 11% at the market bottom in December.
The 20% level is generally considered oversold.
Yesterday's intra day range ended up at 20.08. This was a 74% contraction based on the average true range of 26.98 points.
And for the day, the S & P 500 ended up closing at 41% of the daily bar. This puts the odds of violating the low before the high at around 60%.
The support level from yesterday's daily bar is in the 2,875 area.
Pro open, the S & P 500 is trading relatively flat.
Here are the Key Levels for the Markets:
$VIX:
Minor level: 22.66
Major level: 21.88
Minor level: 21.10
Minor level: 19.53
Major level: 18.75
Minor level: 17.97
Minor level: 16.41
Major level: 15.63 <
Minor level: 14.85 **
Minor level: 13.28
Major level: 12.50
The VIX closed out the day at 13.79. It closed to the upside 0.43 points. The low for the day was 12.85 which was 35 cents above our objective.
12.50 should still be the objective for the VIX
As you know, this is a level where the VIX will typically find support. I will continue to monitor the VIX as we trade closer to it.
14.06 should offer resistance. And if the VIX breaks under 13.28, look for that move to 12.50. Same as yesterday. If the VIX can hold 13.28, I would expect a further bounce.
SPX:
Major level: 2,890.60 <
Minor level: 2,871.08
Minor level: 2,832.03 **
Major level: 2,812.50
Minor level: 2,792.98
Minor level: 2,753.93
Major level: 2,734.40
Minor level: 2,714.88
Minor level: 2,675.83
Major level: 2,656.30
Minor level: 2,636.75
Minor level: 2,597.65
Target is now up to the 2,890.60 level. And the market is inching closer to it.
2,871.10 is a minor support level. Watch to see if the market holds this level today.
2,873.50 is also a minor support level to watch.
Both the 30 and 60 minute charts continue to be bullish. So, bias is still to the upside. Technical support is at 2,840.
QQQ:
Major level: 193.75
Minor level: 192.19
Minor level: 189.06
Major level: 187.50
Minor level: 185.94
Minor level: 182.81 **
Major level: 181.25 <
Minor level: 179.69
Minor level: 176.56
Major level: 175.00
Minor level: 173.44
Minor level: 170.31
Major level: 168.75
Minor level: 167.19
The QQQ closed at 183.78. The QQQ did have its second close above 182.81. This does suggest that the upside target is 187.50.
And support should be at 181.25 and 179.69.
Like the S & P 500, both short term charts are bullish. Technical support is at 182. Continue to buy against support.
IWM:
Major level: 168.75
Minor level: 167.19
Minor level: 164.06
Major level: 162.50
Minor level: 160.94
Minor level: 157.81
Major level: 156.25 <
Minor level: 154.69
Minor level: 151.56 **
Major level: 150.00 <
Minor level: 148.44
The IWM closed at 155.16. The IWM continues to inch closer to the target of 156.25.
But, we still have the midband overhead as resistance. That level is 156.01. Yesterday's high actually took out the midband by 14 cents. The question is, can it close above it?
153.13 should offer support now. And the 154 area should offer technical support.
154.69 is a minor support level.
TLT:
Major level: 128.13
Minor level: 127.74
Minor level: 126.95
Major level: 126.56
Minor level: 126.17
Minor level: 125.39
Major level: 125.00
Minor level: 124.61
Minor level: 123.83
Major level: 123.44 <
Minor level: 123.05
Minor level: 122.27
The TLT closed at 123.52. 123.44 is a major support level. If the TLT can hold this level, it should get a bounce.
If the TLT does break under 123.44, I would expect support at 121.88.
125 should now be resistance. And minor resistance is at 124.61.
GLD:
Major level: 126.56
Minor level: 126.17
Minor level: 125.39
Major level: 125.00
Minor level: 124.22
Minor level: 122.66
Major level: 121.88 <
Minor level: 121.09
Minor level: 119.53
Major level: 120.31
Minor level: 119.92
Minor level: 119.14
Major level: 118.75
The GLD closed at 121.80. The GLD is now trading around the major 121.88 level.
If 121.88 cannot hold, I would expect a drop to 120.31. And I would expect support there. And a bounce at 120.31.
The 60 minute chart still remains in a downtrend. And now the 30 minute chart crossed into a downtrend. This now suggests that rallies should be sold.
Technical resistance is around 123.
XLE:
Major level: 71.88
Minor level: 71.10
Minor level: 69.53
Major level: 68.75 <
Minor level: 67.97
Minor level: 66.41 **
Major level: 65.63 <
Minor level: 64.85
Minor level: 63.28
Major level: 62.50
Minor level: 61.72
Minor level: 60.16
Major level: 59.38
The XLE closed at 65.89. Still, expect a move up to 68.75.
But, the XLE is still trading just under the midband on its daily chart. That price level is 68.81. The XLE will have to, of course, clear this level.
So, there are two targets right around the midband.
I would expect strong support at the 65.63 level and the XLE closed just above it yesterday.
Short term charts remain bullish. Buy against support.
FXY:
Major level: 89.84
Minor level: 89.65
Minor level: 89.26
Major level: 89.06
Minor level: 88.87
Minor level: 88.48
Major level: 88.28
Major level: 87.50
Major level: 86.72
Major level: 85.94 <
Minor level: 85.75 **
Minor level: 85.36
Major level: 85.16
Minor level: 84.97
The FXY closed at 85.56. Watch to see if the FXY can clear 85.94. It should be resistance, so if it can get above it, I would expect a bounce.
But, I am biased for a drop to 85.16.
If it can't clear 85.94, I would expect a drop to 85.16.
Technical resistance is around 86.
AAPL:
Major level: 200.00
Minor level: 198.44
Minor level: 195.31 **
Major level: 193.75 <
Minor level: 192.19
Minor level: 189.06
Major level: 187.50
Minor level: 185.94
Minor level: 182.81
Major level: 181.25
Apple closed at 195.35. Starting to move away from the midband.
If you did buy at 189.06 the other day, you are up on the position.
A close today above 195.31 and Apple should test 200.
WATCH LIST:
Bullish Stocks: CMG, AVGO, COST, MA, SHOP, AMT, MCD, CLX, HON, V, KMB, DRI, HSY, PYPL, YUM, WING, EPR, WPC, SBUX, CLH, THS, RIO
Bearish Stocks: NOC, LLL, HUM, BIDU, CTXS, ALL, SWKS, SINA, WDC, GOOS, FLIR, Z, YELP,
Be sure to check earnings release dates.
